Lockheed Reaches Final Agreement on F-35 Lots

Sep. 28, 2013 - 03:45AM
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Lockheed Martin has reached final agreement on the sixth and seventh batch of F-35 Joint Strike Fighters, for the first time dropping the cost of an F-35A conventional variant below $100 million.

In addition to that milestone, the two lots mark the first deliveries for international partners Italy, Australia and Norway. The company will begin deliveries of low-rate, initial-production 6 planes in the second quarter of 2014, with LRIP-7 jets arriving a year later.

While the company negotiated the two lots at the same time, there are different prices for each jet:

■The F-35A conventional takeoff and landing (CTOL) model cost $103 million per jet in LRIP-6 and $98 million per jet in LRIP 7.

■The F-35B jump-jet variant cost $109 million per jet in LRIP-6 and $104 million per jet in LRIP-7.

■The F-35C carrier variant cost $120 million per jet in LRIP-6 and $116 million per jet in LRIP-7.

Lockheed netted $4.4 billion for the production of Lot 6 and $3.4 billion for the production of Lot 7. The two lots combined total 47 F-35A models, 13 F-35B models and 11 F-35C variants.

“Lockheed Martin is extremely pleased with the LRIP 6 and 7 contract signing, which represents a significant milestone for the F-35 Program and its path to enhanced affordability,” Loraine Martin, Lockheed vice president and general manager of the F-35 program, wrote in a statement. “With each successive production lot, unit costs have declined. That’s a trend we look forward to continuing as this program moves toward full rate production and operational maturity.”

An unattributed government statement forwarded by Lockheed noted that these two contracts include increased protection for taxpayers in the case of cost overruns. “In the LRIP 6 and 7 buy, Lockheed Martin will cover all cost overruns,” the statement reads. “The government and Lockheed Martin will share returns (20/80) derived from any under runs in target cost.”

September has turned into a banner month for the program. In addition to the contracts, the Netherlands made a long-awaited decision to commit to the F-35. Days later, South Korea rebuffed Boeing’s F-15 Silent Eagle for its F-X fighter replacement competition, leaving the Joint Strike Fighter as the likely victor.